Politics

Obama wants to fight income inequality…with more free trade?

On Saturday, the World Economic Forum’s annual meeting, a.k.a. Davos, came to an end. But its spirit of transnational and bipartisan cooperation among the rich will live on—at least for a few more days: on Tuesday night, President Obama will deliver his fifth State of the Union Address.

Left unmentioned by the administration is that its expected proposals on trade stand to pit the Democratic and Republican bases against their respective parties’ elites. In addition to strenuously, repeatedly and regularly denouncing inequality, the president is expected to use the State of the Union to call for trade liberalizationwith 11 Asian and Latin American nations, and to seek Trade Promotion Authority (TPA). TPA is a congressional mechanism which would enable finalized trade deals to be considered on a legislative “fast track,” on a closed, as is, take it-or leave-it basis.

Without Republican crossover votes TPA is as good as dead. On the Democratic side of the ledger antipathy towards free trade is presumed and, by now, historic. It is pretty much baked into the Democrats’ DNA. For instance, in 1993 President Clinton was forced to work in tandem with congressional Republicans to secure passage of the North American Free Trade Agreement (NAFTA) because a majority of congressional Democrats opposed its enactment.

Fast forward to the 2008 Democratic primaries, where Obama expressed his hostility to NAFTA because it favored Wall Street over Main Street—his words, not mine. In a debate held in the pivotal rust-belt swing state of Ohio and hosted by MSNBC, Obama announced that NAFTA “did not have the labor standards and environmental standards that were required in order to not just be good for Wall Street but also be good for Main Street.” For good measure, Obama added that, “I will make sure that we renegotiate, in the same way that Senator Clinton talked about.”

Did Obama really believe what he was saying? Well, while the candidate was decrying NAFTA in front of the cameras, Austan Goolsbee, Obama’s senior economic policy adviser, was secretly offering verbal succor to Canadiandiplomats. According to Joseph De Mora, a Canadian political and economic affairs consular officer, Goolsbee admitted that Obama’s stated position was “more reflective of political maneuvering than policy.”

Suffice to say, NAFTA hasn’t been renegotiated. Suffice to say, details of the now-pending trade deals were being hammered out with Obama in the White House and Hillary Rodham Clinton ensconced in Foggy Bottom.

Still, TPA’s fate is very much in doubt. Already, 17 Democratic senators and a majority of House Democrats have expressed their opposition to granting Obama legal authority to conclude trade negotiations and make them law. Significantly, Senator Elizabeth Warren is one of the seventeen and that spells trouble for thepresident. Her stance will be used to highlight the nexus between globalization and inequality, which presumably Obama abhors, at least the latter anyway.